Fleet Management

Cut Costs with an Accident Management Program

Most trucking companies are not taking advantage of a proven way to achieve significant net cost reductions: outsourcing their accident management program. By partnering with the right company, a truck fleet can cut the net cost of accidents by tens of thousands of dollars a year or more in a number of ways.

First, an outsourced provider with a strong nationwide network of pre-qualified collision repair centers can save money on towing expenses. Towing can be expensive, especially when you tow a wrecked vehicle hundreds of miles because you don't know of a reliable repair shop near the accident site. Third-party accident management companies structure their network to be sure that a high-quality repair shop is never very far from where their customers might have a wreck.

Secondly, an accident management firm can secure priority service with shops because the shops rely on them for volume business. This means faster cycle time on repairs and reduced storage and rental vehicle charges.

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Third, at CEI we have a team of licensed physical damage appraisers who scrub every estimate, looking for the most cost-effective means of delivering a high-quality repair, and we document what we save on every repair. Last year, we saved our fleet clients more than $7 million on repairs, and on trucks the savings can be as much as 10% or more on a single repair.

Fourth, even among the most advanced truck fleets, a significant percentage of collision repair expenses aren't traced to documented accidents. A number of fleets don't track incidents for small damages, but they can add up to a big number. According to the Federal Motor Carrier Safety Administration, in 2009 property damage-only collisions cost commercial vehicle operators $5 billion, or about $15,000 per accident.

Keeping cumulative records of minor damage, such as broken mirrors or cracked bumpers, could alert fleet managers to change to equipment more resistant to damage or identify types of accidents where driver training may be needed. You can do this in-house, but outsourcing may make it easier.

Finally, an accident management company can dramatically increase the money a truck fleet collects from at-fault third party drivers. Many trucking companies have cut back on headcount, and the top priority of fleet management departments is to get trucks back on the road. I've had many fleet managers tell me collecting for damages is an area they'd like to improve upon, but just don't have the resources.

At CEI, we have an entire department devoted to collecting damages for our client fleets, and they recover more than $35 million a year. They pursue claims for around 30% of all the accidents we handle, and recover well over 90% of the dollars they seek. And they do it fast. Since we handle the repairs, we can start the recovery process within hours after we're notified of an accident, and we collect, on average, in 55 to 60 days after sending the demand.

When you consider that 75% of truck accidents are caused by the other driver, and that individual truck repairs can be quite expensive, you're looking at the potential of making a major reduction in the cost of a truck fleet's accidents if you achieve that kind of success.

Luann Dunkerley is national business development manager for truck and service fleets at The CEI Group Inc.